1 Canadian stocks to buy and hold forever in a TFSA

After an exceptional year for Canadian stock markets, it’s time to reflect on where the value of the TSX Index stands as we enter the new year. As you know, TFSA (Tax-Free Savings Account) top-up season is almost here, and once January rolls around, Canadian investors will have the chance to contribute another $7,000 (it’s a shame it’s stuck at that level even after another year of inflation). Nevertheless, investors can use the proceeds to invest in a quality name that could increase significantly in value over the next three to five years.

There are undoubtedly many potential names to put on the TFSA buy list. You could certainly stick with what has worked all year. The big Canadian banks have made every effort, and it may be difficult to stop them as they continue to report strong profits. At the same time, some gold miners have done well for investors who have stood by them amid the rally in precious metals prices.

While it’s hard to say whether the materials and financials sectors can continue to drive the TSX Index to results that have put the S&P to shame, I certainly don’t see much fuss in the two sectors, especially when we’re talking about the industry heavyweights (particularly the largest cap gold miners and the Big Six banks).

Shopify

Technical sensation Shopify (TSX:SHOP), while more volatile lately, is still one of the shining stars for the Canadian stock market. It’s taking advantage of the AI ​​boom, and it’s not even close to being done yet.

Despite the recent volatility, SHOP shares are up nearly 50% so far this year. That’s a great win for a tech-driven company that may have more room to run given its high growth rate, strong execution, and an incredibly high total addressable market that still appears to be growing rapidly as AI opens up new long-term opportunities for the company.

Sure, SHOP stock may seem fully valued now that its market cap is above the $300 billion level. But if Shopify can continue to invest and collaborate with specialized partners in the AI ​​space, I think the stock is still relatively undervalued, especially when you look at the much hotter AI software stocks that have risen much more over the past two years.

In an earlier piece, I highlighted the fourth-quarter correction as a likely buying opportunity. And while last month’s 9% may seem too steep to fall behind as we enter January, I’d argue the stock could still be a top candidate to deliver a big growth surprise in the new year.

In short

Of course, I believe the AI ​​revolution will happen over several years (even several decades), so investors should be patient and try to build a position over many quarters, rather than trying to trade and make a quick profit in a few months. Ultimately, Shopify is a secular growth story that doesn’t deserve to go cheap.